The future of manufacturing is people not ‘things’

Posted on 14 Sep 2020 by Jonny Williamson

Simon Jacobson is Vice President of Gartner’s Supply Chain Research team and specialises in how the coming together of technology, people, process and data enables ‘Smart Manufacturing’.

Covering Europe, North America and Asia, Simon is at the forefront of how industrial businesses are bridging the gap between digital aspiration and current state.

Jonny Williamson sat down with Simon to discuss tribal ways of working, the potential for an industrial gig economy and how to become comfortable with uncertainty.

Looking across the three global territories, which markets are leading the digital transformation journey?

Simon Jacobson: Everyone wants to know who the leaders are, that’s where the challenge lies.

I’m not saying that there aren’t industry leaders, but for me, it’s more about the belief, the confidence to succeed. And our research shows that there is confidence in the market.

In 2019, we conducted a study that asked recipients to measure themselves on a scale of being ‘extremely confident’ through to ‘not confident at all’.

The majority of those we surveyed were either ‘somewhat confident’ or ‘extremely confident’; and those that returned an ‘extremely confident’ verdict operated in high-tech and industrial manufacturing.

The Manufacturer Front Cover - September 2020This article first appeared in the September issue of The Manufacturer.

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That’s not surprising from a digital perspective, as they are the verticals that have either been there and done that or are currently there. ‘Somewhat confident’ was where CPG, retail, healthcare and pharma sat.

My own assessment of the markets showed a significant difference between Asian and Western organisations.

Asian businesses demonstrate a certain energy, a passion for improvement, and often don’t suffer from the same level of bureaucratic handcuffs and technical debt as many European and American businesses do. That enables them to go from zero to 60, so to speak, much faster.

Most businesses are hampered by some form of legacy infrastructure or equipment, and with the intensified focus on automation, many are underestimating the potential technical debt they’ll have in terms of upgrading or improving the maintenance of operational technologies such as motion controllers, PLCs and drivers.

This is an area where, in some cases, organisations can show bias towards change due to their heritage, preconceived notions or tribal ways of thinking and working, and that’s what’s holding a lot of businesses back.

The world is changing so fast that what was successful today is not necessarily going to be as successful tomorrow. Is the belief that strategies that have traditionally borne out success will continue to bear out success compounding the issue?

I agree but disagree. Here’s why; pre-pandemic, many manufacturing businesses were facing the challenge of digitising their workforce, of attracting and retaining the right people with the right skillset.

I was speaking with a client about this and they told me associates would show up at work with a nicer phone than the interfaces they dealt with on a daily basis in the factory

The past few months have brought a sea change. Up until this year, so much focus has been on ‘the thing’, i.e. the asset or equipment.

Businesses plan around the equipment, they de-bottleneck all constraints around the equipment; the IoT has focused on the performance of equipment, eliminating downtime to save costs, improve efficiencies and increase flexibility around certain line setups, and there’s nothing wrong with that.

What’s happened now is an increased emphasis towards labour; people are the new constraint. Skills and knowledge are an asset in and of itself, and while physical assets depreciate, human assets and knowledge increase continuously.

Knowledge and skills have started to dissipate, and especially now, businesses are scrambling to put in place the right labour strategy. Staggered shifts, contingency workforces, knowledge transfer, these are all things that have become safety mechanisms and risk mitigation, but increasingly they are going to become the norm.

Manufacturers have seen that not all jobs have to be performed onsite; remote working and virtualisation has fundamentally changed the staffing model, and this is now the new constraint or opportunity, depending on how you choose to view it.

Video call. Remote work. A girl work from home. She communicate via video communication with colleagues using computer - Shutterstock

There is still a prevailing ethos that if workers aren’t onsite, they aren’t adding value. But we have seen businesses successfully adopt staggered shifts and use digital technology to connect workers across different sites, and this convergence of lean and digital has accelerated problem solving.

This is going to change the on/offsite model and accelerate the systematisation of operational knowledge. That’s very exciting. This raises the question, is there a potential future for the gig economy in manufacturing?

We hire people for their hands, yet their brains are so much more magical in what they can do. With the right tools, their ability to interpret signals or identify solutions much faster, and that is where the change in skillsets will happen.

Breathing new life into those workers who may view their current position as something of a career cul de sac and turn them into, as we’ve seen happen recently, virtual consultants across organisations and sites in order to proliferate their knowledge.

That’s an interesting perspective as many manufacturers are struggling to unlock the knowledge trapped inside the heads of experienced workers. And it’s not just extracting that knowledge, it’s putting it into a larger, searchable database that people can type inquiries in to find answers or suggested actions.

Indeed, and this is what we’re seeing with the rise of the ‘connected worker’, where individuals are integrated with workflows or workflows are added to the processes they participate in.

We also have to look at how HR handles exit interviews for when workers decided to move on.

Video Interviews - Businesswoman making video call to business partner using laptop, looking at screen with virtual web chat, contacting client by conference, talking on webcam, online consultation, hr concept, close up - shutterstock_699442555

I’ve yet to see a company say to exiting staff, can you write down the five or six things you would change at this facility? You’ll uncover more insight from that simple list than if you shadowed an employee for a month.

The challenge is the lack of standardised methods to perform certain tasks, without which it’s almost impossible to then identify the right tool to digitise that tasks with; you end up investing in chaos rather than capability.

That’s where a hand-held app or some form of virtual overlay can pay dividends by walking someone through each step in the process and help ensure consistent OEE and reduces the chances of unplanned or extended downtime.

Gartner’s messaging of late seems to be around decision makers needing to become comfortable with uncertainty, to embrace it rather than shy away. How can that change in mindset be facilitated?

For a factory manager, risk and uncertainty is going to continue to happen and they will have to deal with it. If we look at the amount of times the work orders change, or the forecast changes, that’s risk and uncertainty.

We happen to be dealing right now with a circumstance previously un-encountered and that’s where the challenge lies.

china auto plant (Shutterstock)

First, factory leaders are going to have to create an environment where there is comfort.

Second, how do we now extend flexibility to the workforce, at a corporate level? Other industries such as retail and hospitality, for example, provide flexible scheduling where employees can swap shifts based on personal circumstance. Could manufacturing embrace that?

This approach means we’re still getting the most out of employees, but it also relies on upskilling or retraining those mono-dimensional workers who have one specialty skillset and that’s it.

The past several months has really been a catalyst to change, in this respect, and it isn’t just something that’s financial, it’s also an opportunity for organisations to get personal.

The challenge will be the creativity in which companies fund these initiatives because CapEx isn’t available.

It’s not necessarily a race of how fast industry can get there; it’s a matter of how organisations choose and time their investments wisely.

*All images courtesy of Shutterstock